ATLANTA–A higher concentration of middle-income households outside the city boundaries of Atlanta significantly lowers the income inequality in Atlanta’s Metropolitan Statistical Area (MSA), a new analysis of data by Georgia State University’s Center for State and Local Finance (CSLF) suggests.
A Brookings Institution ranking of 50 large U.S. cities by level of income inequality showed Atlanta at the top earlier this year. The new CSLF report shows that Atlanta’s ranking slips to the middle of the pack – No. 19 – when the area examined is expanded beyond Atlanta’s city limits to include all counties in the metropolitan statistical area.
The CSLF’s inaugural report, “City Income Inequality,” also shows that although the city does contain higher concentrations of low-income and high-income households, the inequality is due more to the higher concentration of high-income households in the city. The City of Atlanta comprises only 8.2 percent of the MSA population, while on average the 50 cities ranked comprise 33.2 percent of their MSA population. This implies that the City of Atlanta share of its MSA population is a significant factor in explaining the City’s No. 1 Brookings ranking for income inequality, according to the new report.
“Our findings imply that the income inequality within the city of Atlanta is not reflective of that in the metropolitan statistical area as a whole,” said study co-author and Professor David Sjoquist, who holds the Dan E. Sweat Distinguished Chair in Educational and Community Policy. CSLF researchers Lakshmi Pandey and Laura Wheeler are co-authors of the report.
They also found that the rank of a city is negatively correlated with the share of the MSA’s total population living in the central city, so cities such as Atlanta that rank very low in terms of overall share of the MSA total population tend to rank highly on income inequality.
The income difference is further associated with a smaller group of people in middle-income categories living in the City of Atlanta: 32 percent compared to the U.S. average of 39.8 percent.
“The issue of income inequality does have serious implications for the city and the metro area, but this issue needs to be considered in context,” said Sjoquist. “The problem is not high-income inequality throughout the metro area per se, but instead that income inequality is concentrated in the central city.”
Download the CSLF’s new report, “City Income Inequality,” at http://cslf.gsu.edu/.